Long-Term care indemnity anyone?

Money-saving-gal

Hi I just joined today!

I wonder if anyone has ever purchased a long-term care indemnity(sp?) for an elderly relative? I'm thinking of buying one of these on behalf of my father who has just gone into a care home. I'm trying not to let the whole estate be swallowed up by care home fees (av. £700 per week!!!!!) These policies cost between about £60,000 and £90,000 but then pay the CH fees for the remainder of the person's life.

I've spoken to an ind. fin. advisor from SAGA who was v. helpful - apparently, only a few companies offer this nowadays but I can't seem to find anyone that has bought one - I would like to find out what others think. I'm considering another option which is investment but I like the idea of a one-off fee IF there's enough evidence that it's a good option.

Hubby v. wary - he thinks there will be a catch and it's a lot of money (not ours) to risk. Help!!!:(

lisyloo

I have a feeling that most people don't stay in a care home longer than 3 years (of course variation is possible).
On that basis, I would say this is hugely overpriced.

I would certainly not rely on what strangers say on forums, but I would suggest you investigate how long the average stay in a care home is before considering whether this is good value.

I'm trying not to let the whole estate be swallowed up by care home fees

You are talking about them as if they were dead. The elderly persons interest should come before benfeciaries whilst they are still alive.
I appreciate that you don't want to be ripped-off however whilst they are alive the money should be used to enhance their quality of life as much as possible (within reason of course).

Consider if you get the care home fees paid through this mechanism, then what happens if you find you want to transfer to another care home for whatever reason.
What if the original care home fees go up. Is the place guaranteed or will the person be asked to move somewhere cheaper. Moving very elderly people can be enormously upsetting for them and has in some cases resulted in death.

My gut feeling is that I would "pay as you go" because the premium for peace of mind seems very high, plus they may be some questions marks about what guarantees and flexibility you have.

I am sure the IFA is very helpful. That's their job and they will get paid for it.
I'm not saying they are doing anything wrong.
They deserve to earn a living for their work like everyone else.
But if you walked into a car showroom they'd be very helpful and friendly too.

dzug1

I've answered in your other post - basically what lisyloo says

dunstonh

I tend to find that most people go down the investment route instead. A few have gone down annuity route but the investors have consistently ended up with the better option in the end. Annuity gives certainty and guarantees. Investments dont. Life expectancy and health are often drivers but like lisyloo says, the life expectancy of many in homes is not very long. The amounts involved are key as well. The required income yield can have a big impact as that would say whether erosion of capital is likely or not.

I'm considering another option which is investment but I like the idea of a one-off fee IF there's enough evidence that it's a good option.

That would then require the IFA to compromise on the investments and use more basic options, such as self balancing portfolio funds. These are typically upto twice the cost of a portfolio under review from an IFA or discretionary investment manager. So, whist you have a one off cost with the IFA, you are paying more in annual management charges.